Nokia announced this week that it’s going through a major reorganization this summer.
It is currently organized into Devices, Services & Software, and Markets. After July 1 this will change to Mobile Solutions, Mobile Phones, and Markets. In its simplest form, Nokia is creating a unit that makes high-end phones, another unit that makes featurephones, and a third that handles marketing.
Is this setup better than the last one? Who knows? But a reorg is usually a sign that something is wrong, while frequent reorgs are a sign that something is really wrong. And Nokia has a habit of reorganizing every couple of years. The latest will replace a corporate structure that has been in place only since 2008.
Nokia isn’t in trouble — it’s the worlds biggest phone maker after all — but its rivals are gaining on it. It needs to do something if it wants to stay on top.
I don’t know that yet another reorganization is the answer. The thumb rule that I was taught is that a major reorg distracts the management and employees of a company for 6 months. That’s not the best way to get Nokia back on track.
Progress Despite the Reorg
That’s why I’m taking this upcoming organizational shift as a bad idea, especially as the company had made some really positive moves under the current system.
Nokia has needed to use better operating systems on its smart phones for years — it depended on Symbian S60 for much too long. The company seemed afraid of change, and kept tinkering with S60 hoping to finally get it right. Meanwhile, Americans consumers stayed away in droves.
Much-needed change is now happening, with MeeGo and Symbian^3 powering the next generation of Nokia’s smartphones. I’m not promising that these are finally going to get Nokia’s U.S. marketshare out of single digits, but at least they are a move in the right direction.
Now that progress is finally happening, it’s not good that all Nokia’s employees are going to be distracted by yet another reorganization.